Croatia reduces luxury tax on boats
By IBI Magazine/Tony Jones
As a result of severe pressure from all sectors of its boating industry, the Croatian government has drastically reduced the so-called 'luxury taxes' payable on leisure craft that it imposed in August last year.
Originally, the government imposed additional taxation based on 11 price brackets. The lowest bracket was 'Up to Euro €50k'; the highest, 'More than €500k'. Every vessel was subject to the Fixed Luxury Tax (FLT) applying to its bracket, plus an additional Variable Luxury Tax (VLT) calculated on how much the actual sales price exceeded the bracket minimum figure.
The lowest bracket, on boats up to €6,800, imposed no FLT — just a VLT of 13 per cent. In the top bracket, vessels costing €68,500 and more were subject to an FLT of €24,300 plus 63 per cent of the sales price over and above €68,500.
The new tax regime that came into force on February 14 splits sales into 12 quite different brackets. Boats costing up to €27,400 are FLT-exempt and subject to a VLT of 5 per cent, while those of €548,000 and above are subject to an FLT of €61,000 plus a VLT of 16 per cent on the amount above €548,000.
Look out for an in-depth account of the whole Croatian luxury tax episode in the next issue of IBI.
(9 March 2010)
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